Sign up for the free RSD newsletter to get the latest
news and interviews delivered to your inbox.

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Nevada Sunrise (TSX-V: NEV)(OTC: NVSGF), Mr. Warren Stanyer. Warren, how are you this morning?

Gerardo Del Real: Thank you so much for taking the time, Warren. I had to get you on the phone because, frankly, we all know it's a tough market in the junior resource space right now. But for a company with a market cap of less than $3 million Canadian, you have a lot going on right now. You have a lot of forward momentum. I wanted to take a moment just real quick to provide a brief overview of the company.

You have a 20.9% interest in the Kinsley Mountain Gold Project, which is operated by Liberty Gold. That's a property that's always been attractive to me. You had some great intercepts. There's a ton of exploration upside, but it's a property that has kind of taken second and third in line with Liberty Gold as they develop some of their other assets, although it's still a priority.

Before we get to Coronado because I'm excited as well, I want to talk about the status of the water rights that are in litigation as we speak, because there's been some positive developments on that front.

Warren Stanyer: Well, we were denied due process on that forfeiture and we've been fighting since December of 2016 on that, Gerardo. We're very close now to a hearing date, and what's been gratifying is that, in the past few months and year, there have been reversals of similar forfeitures where the state engineer acted in a very capricious manner. I'm just going to quote to you something from a document I received the other day of the most recent reversal of a forfeiture.

"The state engineer's previous practice of giving notice prior to forfeiture, this court believes, was the correct interpretation of the legislative intent. The reinterpretation by the state engineer that no notice was required if the water was not used for over five years was an error of law."

That's in this document released in late August. This other water right has been returned to the owner, and we believe that it's a very similar case to ours, that ours should be returned as well.

Gerardo Del Real: That's a big deal because I mentioned – and I know you won't say it, but I will – I mentioned off the top that you have a market cap south of $3 million Canadian, and I believe that those water rights could represent a significant portion of that market cap if all you had were those water rights restored.

Now, let's move on to Coronado. Coronado is a VMS property that is also in Nevada. It's an exciting property. You just recently flew your first airborne electromagnetic survey. What did that look like? What did the results look like there, Warren?

Warren Stanyer: Well, you hold your breath when you send out a helicopter with that bird being towed underneath because you want to find something. You realize there's the potential that you may not, but in this case, what was really exciting was seeing these anomalies appear with distance between them which is similar to how VMS deposits occur worldwide. There's clusters of these VMS deposits, these eruptions that occurred on ancient seabed. They weren't necessarily 100 meters away from each other.

What we have in that area is the Big Mike open pit, the copper mine that was mined out in one year because it was quite small, but it was found from an outcrop. That outcrop had gold in it. People knew about it for 30 years, and then they started drilling deep. That's when they found the copper deposit. In a way, it's like Royal Nickel having a nickel mine and realizing they now have a gold deposit as well if I've read that correctly.

Gerardo Del Real: Now, can we talk about the history of Big Mike? Because I've joked in the past back when Pokemon was all the rage that anomalies in the junior space are like Pokemons. They're everywhere, right? But the big significant aspect is that Big Mike is a past-producing mine and the grades, although the deposit was small, were absolutely fantastic. Can you explain some of the history of Big Mike and the proximity there?

Warren Stanyer: Well as I said, there was an outcrop so it led people there to sample it. They found gold in it. Over time, perhaps people thought there wasn't enough in it because in the 1930s, I think we all know the gold price was, say, $20 US or less at times until the 1970s when things started to change. If you didn't have a half ounce or an ounce material pretty close by, you weren't going to be making a mine.

People looked and saw the potential. When they drilled through the overburden, they drilled 200 to 300 feet down and all of a sudden hit this massive chalcopyrite which ran up to 10 to 12% copper. The other thing of interest is that no one ever spoke of the cobalt, but we know that, from sampling that was done in the 1980s in and around the pit, there's 0.25% cobalt in sample after sample that was taken 30 years ago. We've just taken some samples that are in the lab of the massive sulfide pieces that are laying around that you can find, and so I can't wait to see that because cobalt wasn't really talked about in the 1970s.

This ore was so high-grade it was actually shipped straight to smelter. It wasn't processed in the United States. They did take lower grade material, the low grade was 3% plus and they heap leached it until 1978. Then all operations ceased. Who knows what the economic reasons were that everything stopped, but it just stopped. There was no way to go out in the countryside. If you didn't have an outcrop with something sexy in it, then why would you start drilling a hole?

What we've done in an area where there's dirt covering almost everything, we found some outcrop at Coronado South and we see the hallmarks of a VMS deposit, the surface expression. Our geologists are very pleased with what they found just two weeks ago.

Gerardo Del Real: You referenced in the news release that you intend to test the best targets with the reconnaissance drilling program before the end of 2018. Can you tell me a bit about the approach there?

Warren Stanyer: Well, fortune favors the bold, Gerardo. We'd like to find out what's there. Because it's only 60 meters down, the first hole that we have planned is 300 feet. Obviously, you'll have to get some kind of a minimum for a driller, but this is a very expedient way of testing the anomaly, a buggy-rigged coring drill that's drilling, say, one or two shallow holes into the heart of this thing. If we see what we want to see, then we'll start drilling scissor holes or angled holes through it that are much longer.

Gerardo Del Real: Fantastic. Warren, I look forward to the results that are in the assay lab and, of course as always, I'm looking forward to getting a hole in there and seeing what's down there. Is there anything else that you'd like to add?

Warren Stanyer: Well I'd like to tell you that we've also marketed our Golden Arrow project to Emgold Mining Corporation. Just signed the deal for that yesterday. It's been hanging for quite a while. It's gone through various iterations. What we decided to do, it's potentially an outright sale, but we would become a major shareholder of Emgold, symbol EMR (TSX-V) where we would receive 2.5 million shares for 51% interest. Should they go and want to take 100%, they'd issue another 2.5 million shares within two years. We wish them well. They raised the money, drilled the holes to expand Golden Arrow from 300,000 ounces or so to a larger resource. That's gold of course.

Gerardo Del Real: Absolutely. Well between the sale of Golden Arrow, the optioning of Lovelock and Treasure Box, the litigation on the water rights, Kinsley Mountain, and now of course Coronado, there is a lot of value there. It's a tough market. I'm biased. I participated in the recent financing at $0.15. I was rewarded for my intellect by seeing that speculation cut in half almost immediately, but I got to say there were few value propositions with as little downside and as much upside in the market right now as Nevada Sunrise. You should be commended for keeping active in a tough market and keeping the deal flow happening with properties. As a shareholder, I want to say thank you, Warren.

Warren Stanyer: Well you're welcome, Gerardo. We appreciate the support of people like you. That's one of the reasons I want to drill this project as quickly as possible. You wrote a check. A lot of people wrote checks for that half a million dollars we raised, and I want to put it into the ground as soon as we can.

Gerardo Del Real Well, Warren, I hope I get to write another check at much higher prices. You said fortune favors the bold. Fingers crossed, right?

Warren Stanyer: That's right. All we can do is try. We have the best tools at our disposal. In Ted DeMatties we have a VMS expert for Coronado. He's very, very excited. When geologists that have this level of experience are telling you that this is one of the best things they've ever seen, then you are compelled to drill it and do it as soon as you can.

Gerardo Del Real: Fantastic. Warren, thank you again for your time today.